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Zhao, who is expected to be sentenced on April 30 in Seattle, stepped down as Binance’s chief last November, when he and the exchange admitted to the violations, and the firm agreed to a penalty of $4.32 billion.
“Given the magnitude of Zhao’s willful violation of U.S. law and its consequences, an above-guidelines sentence of 36 months is warranted,” U.S. prosecutors told the U.S. district court for the western district of Washington.
Federal sentencing guidelines set a maximum sentence of 18 months in prison for Zhao, who had agreed not to appeal against any stretch up to that length. He has been free in the United States on a $175-million bond.
U.S. authorities have said Binance failed to report more than 100,000 suspicious transactions with designated terrorist groups including Hamas, al Qaeda and the Islamic State of Iraq and Syria, or ISIS.
Prosecutors said Binance’s platform also supported the sale of child sexual abuse materials and was a recipient of a large portion of ransomware proceeds.
Zhao, commonly known as CZ, agreed to pay $50 million and cease involvement with Binance, which he founded in 2017.
Binance’s penalty included a $1.81-billion criminal fine and restitution of $2.51 billion.
